Funeral probe shouldn't affect Missouri clients

Tuesday

A recent announcement that a national company can no longer sell pre-need funeral plans in Missouri and several other states should have little affect on local consumers, area funeral directors say.

A recent announcement that a national company can no longer sell pre-need funeral plans in Missouri and several other states should have little affect on local consumers, funeral directors say.

National Prearranged Services, based in St. Louis, was recently ordered to stop selling pre-need contracts in Missouri by the state’s Board of Embalmers and Funeral Directors as of April 9. The board took this action to review the company’s business activities. The action came after the Texas Department of Insurance issued a hazardous financial condition order for NPS, Memorial Service Life Insurance Company, and Lincoln Memorial Life Insurance Company on March 17. At the same time, the Texas Department of Banking ordered NPS to cease selling prepaid funeral benefits contracts. The company has not admitted wrong-doing in Missouri.

Tina Hierholzer, who handles pre-need and pre-planned services for Clark Funeral Home, said the state’s investigation of NPS won’t affect her clients.

“It won’t affect us because we don’t use their service. We’re independent of that,” she said. “It won’t have anything to do with any one of our customers, and the main reason for that is we have always kept our own independent trust.”

Pre-need funeral plans operate in the following manner: After a customer plans his or her funeral service, he or she works out a monthly payment schedule. Payments are then entered into a trust, with the accrued funds used to pay for funeral services when the need arises.

Hierholzer said Clark Funeral Home puts these funds into a local trust over which they have complete oversight.

“If people have any question on their trusts, they can call us at 451-2345,” she said.

Likewise, the NPS investigation is having little affect on other funeral homes in the area.

“It doesn’t affect me at all,” said B.J. Goodwin, owner of Ozark Funeral Home. “It honestly won’t affect anyone in Missouri, because Missouri is a trust state. Eighty percent of all pre-need monies have to be entrusted. In order for NPS to operate in Missouri, they had to do the same thing.”

NPS handled pre-need contracts for about 50 funeral homes in Missouri. According to their Web site, www.npsnetwork.com, one of these was Walker-Dowd Funeral Home of Anderson.

However, Tracy Dowd, co-owner of the funeral home, said it actually had very little contact with NPS.

Dowd said payment options at her funeral home are mixed, with some customers preferring to have pre-need contracts to lock in prices or to satisfy conflicts between Medicare and Medicaid and insurance providers. Others prefer to pay for services at the time they are needed, she said.

“What’s happening with NPS will not affect the consumer in any way, shape or form,” she said. “My understanding is it will affect funeral homes.”

Dowd said a fellow funeral director in northern Missouri had extensive dealings with NPS and “had sunk a lot of money into the company.”

“He has to still deal with the families,” she said.

Like Goodwin, Dowd mentioned pre-need funds are mostly placed in trusts, meaning they will be there when the families need to pay for funeral services.

“Missouri’s rules and laws have a reputation for being stiffer,” she said. “And Arkansas is more regulated than we are, actually. The funds are protected. Oklahoma had some problems with people stealing the money and going on vacation.”

Goodwin said some funeral homes outsource their pre-need contracts to avoid handling paperwork. He added Ozark has a full-time secretary who handles its pre-need and pre-planned funeral services.

“I was never a big fan of NPS, anyway,” he said. “I’ve always believed in trying to be good stewards of our families’ money, and not outsource it to a third party. I’m never too busy not to have an interest in our clientele.”

Dowd also wasn’t a fan, saying much of the company’s financial woes were due to high overhead.

“They had 23 people doing claims when they needed five,” she said.

Upon the recommendation of industry regulators, NPS has engaged an independent manager to run it, Memorial Life Insurance Company and Memorials Services Life Insurance Company.

Neosho Daily News

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